Five Questions You Must Ask and Get Answers before Taking a Logbook Loan

admin   10/24/2016   Comments Off on Five Questions You Must Ask and Get Answers before Taking a Logbook Loan

Has your loan been turned down by banks because you have poor credit score or you are recovering from bankruptcy? Other banks will even turn you down because of court cases, not being part the electoral register, or having other loans. However, there are other great options that make it easy for you to get the money you anticipate. One of these options are logbook loans that are very easy and fast to get. However, before going for a logbook loan, here are some crucial questions that you should ask.

How much can I get against my car?

Many logbook loan lenders are willing to give you an amount equivalent to half the value of your car. However, this is entirely dependent on the policy of the lender. Your focus should not be guided by the maximum the car can fetch, but the amount you are looking for. For example, if you only want £10,000, why go for £20,000 because the lender is willing to give it to you?

What is the interest rate of the logbook loan I want?

The interest rate for most logbook loans is higher compared to conventional lending institutions such as banks. The rate ranges from 100%-400% APR (annual percentage rate). The target here is to ensure you get a lender with the lowest APR. Some lenders will even allow you to negotiate for the APR in order to get higher value from the deal.

How can I get the best deal?

Getting the right deal is best looked at from the point of Annual Percentage Rate. You are assured of the best deal by getting the lender with good rates and clearing the loan as fast as possible. For example, if you get a logbook loan with an interest of £1000 for 12 months, you will only pay half by repaying the loan in 6 months.

What risks are involved in logbook loans?

The main logbook loan risks are diverse especially if you default the agreement entered with the lender. Your car will be taken away to clear the loan if you default. Immediately you sign for a logbook loan, the car ownership is surrendered to the lender until the loan is fully cleared. Remember that in the event that the lender comes for your car and sells it, he can still follow you if the total amount did not clear the entire loan.

logbook-loans

How fast does a lender come for the car if I default?

While no one wants to think of defaulting, situations can emerge and make your monthly remittance late with a day or even a week. For example, your salary can get delayed by inevitable situations or clients fail to clear payments on time. When the day you have agreed with the lender passes, the vehicle can be retrieved. However, most of them will rarely come the following day or week.

The ideal way to resolve such an issue is talking to the lender to give the payment date. For example, Just Logbook Loan has a very caring, understanding, and reasonable staff that listens to all clients. Just inform the lender that the salary was delayed with a day and the monthly remittance will be done on a specific date.

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Conclusion

Getting these questions answered will give you a better insight about logbook loans so that you can avoid the associated risks. Besides, having the questions answered by professionals or gathering information from reviews can help you get a better deal. Always remember that logbook loans should be considered as options of last resort.  

Why You Should Go For Guarantor Loans If You Have Bad Credit

admin   10/09/2016   Comments Off on Why You Should Go For Guarantor Loans If You Have Bad Credit

Have you tried to get a loan but always get turned down because of bad credit? When many people’s loan applications are declined, they turn to options such as payday loans, pawnbrokers loans or doorstep lenders that have a very high interest. Better options to consider when in such a situation are guarantor loans. They are easily accessible and all you need is a guarantor.

What is a guarantor loan? This is a form of an unsecured loan that requires a co-signee who is ready to take responsibility for repaying the entire amount in case you default.

Guarantor loans come with numerous advantages

  • Lower interest rates

Guarantor loans are like other commercial bank loans that have low-interest rates. For example, many payday loans and pawnbrokers loans have very high-interest rates with a great risk of getting out of control if you default. With a guarantor loan, you can enjoy interest rates of as low as 5%. Well, compare this with credit card loans that can hit a high of 10% and payday loans that go up to more than 20%. To get the loan, just talk to your close friend or colleague at work to be the loan guarantor. You can read through guarantor loan reviews to find the banks with lower rates.

  • You have access to money even with bad credit

For people with bad credit, thoughts of getting loans remain distant mirages. Every bank will first check your credit and dismiss the application at the earliest possible instance. However, every bank will be willing to allow you get the cash if the guarantor has a high credit score. Though you are riding on the good credit score of your friend, the project you want to fund will not stall. However, you must be careful to ensure that the loan is repaid on time to avoid harming the credit rating of the guarantor and yours too.

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  • Access to larger amounts of credit

When it comes to guarantor loans, the amount you can access is not limited. Whether you want a lot of cash to refurbish your office, buy a new car, take a holiday, or buy furniture, there is no limitation. The focus should be taking only what you can repay comfortably and as fast as possible. Do not fall into the temptation of taking a lot of credit because it is available.

  • Ease of access 

Unlike other loans that require you to submit personal assets as collateral, guarantor loans are very easy to access. Once you make the application and the guarantor signs the loan, it will be just a few days before the credit is wired into your account. In fact, most of the time is spent checking the loan repayment history of the guarantor and his/her credit score.

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Conclusion

Guarantor loans are some of the best options to access a lot of cash if your credit score is low and other options are not reliable. Once you have identified a guarantor, the bank no longer checks on your credit score. However, you should ensure to only borrow what you can repay easily and clear it as fast as possible to avoid hurting the credit score of the guarantor.

 

 

Rise In Guarantor Debts And Unregulated Loans Requires a New Legislation

admin   10/09/2016   Comments Off on Rise In Guarantor Debts And Unregulated Loans Requires a New Legislation

On 27th September 2016, Hilary Osborn wrote a chilling article in the Guardian about the rise of debts from guarantor loans and rent-to-own firms. Like Hilary demonstrated, many borrowers are unable to pay their loans and lenders are left with no option but to follow the guarantors. The 16% rise in these debts in the second quarter of 2016 is a cause of worry that needs a broader focus involving all stakeholders. In his touching example, Hilary demonstrates the serious financial problems that people often get themselves into prompting the need to look for urgent solutions.

Using appropriate legislations can help keep down the cost of interest

When a client goes for unsecured loans such as guarantor loans or rent-to-own firms, it is important to understand resultant impacts. Many people only read through the conditions half way while others sign without a glance. In other cases, the guarantor jumps into the problem and getting out is almost impossible. A suitable legislation would come in handy.

Like Hilary demonstrates in the article, using legislation helped to lower interest rates on payday loans. After introducing price caps on payday loans that limit interest to 100% on the original borrowed amount, people who are struggling with related debt fell with a whopping 53% according to Citizens Advice.

Legislation limiting the guarantor’s liability to a given level could be of great help to ensure that people do not take full responsibility for money they did not use. The responsibility bestowed on the guarantor should have a way out. For example, though the lender should be allowed to go for the guarantor, it is important to also ensure that the borrower is followed to reclaim the incurred losses.

Emphasizing on risks that guarantors take in guarantor loans

While Hilary’s piece correctly captures the unfolding problem that could be a recipe for disaster, he omits a crucial part of the entire situation; risk taken by the guarantor. If guarantor debts rose by 16%, in the second quarter of 2016, why should you get into the same problem?

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Before guaranteeing a loan to your friend, make sure to comprehensively understand the ensuing risks. If you find the risk too much, it is advisable to say no or support your friend with direct cash. Make sure to also read through guarantor loans review to understand the following risks.

  • Risk of the entire loan being shifted to the guarantor.
  • Danger of being dragged to court.
  • Possibility of family breakups after borrowers default.
  • Impact on your credit score after default.
  • Risk of losing personal

Before you guarantee a loan here are things that should guide you

When a close friend approaches you to be his guarantor, it is prudent to know what you are getting into. It is very important to review why the borrower cannot get a loan directly from the bank. Many people looking for guarantor loans have a very poor credit history. In such a situation, the chances of defaulting are very high and the problems headed your way will be too much to bear. In such a case, do not agree to be the guarantor.

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If you have to become a guarantor, insist that the borrower takes a small amount of credit that cannot shock you in the case of default. You can also ask for limited guarantee so that the amount you will be required to pay in case of default is small.

 

Have You Been Approached to Be A guarantor? Here is what you need to know.

admin   10/09/2016   Comments Off on Have You Been Approached to Be A guarantor? Here is what you need to know.

When people have bad credit, one of the best credit options is guarantor loans. In this case, the bank is guided by the creditworthiness of the guarantor as opposed to the borrower. However, what do you do when a close friend asks you to guarantee him/her a loan? Well, this is a monumental task. Before appending your signature and committing to the credit, here are several things you need to know about guarantor loans.

People who can act as guarantors

To guarantee a loan to a friend, you should not be financially linked. For example, a spouse cannot be a guarantor. Therefore, if the borrower is a friend, colleague, family member, or any other close person, you are free to guarantee the loan. Remember that your credit will be checked as if you are the borrower.

The risks of being a guarantor

When you agree to become a guarantor, it means that you are taking full responsibility to repay the loan if the borrower defaults. The lender will slam you with the remaining part of the loan plus any accruing interest. In many cases, banks will come to you even before following the borrower. Some lending institutions may even take you to court.

How to limit your liability

In many cases, guarantor loans are all obligations which mean that you commit to the full amount. If the client defaults, you will be required to clear the remaining amount. However, you can limit the amount you guarantee to the borrower by asking the bank for a limited guarantee.

Your relationship with the borrower

When you guarantee a loan to a friend, it is a requirement that you get a copy of the agreement to know all the terms and agreements. However, since you do not have control on how the borrower uses the money, it is advisable to insist on a binding agreement requiring the debtor to inform you of every financial decision related to the loan. Besides, the debtor must agree to show you the amount in his/her accounts and indicate which part of the loan you are responsible for.

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How guaranteeing a loan affects your credit score

While being a guarantor does not directly affect your creditworthiness, the score can be damaged if the loan agreement defaults. A copy of the loan agreement will appear on your credit report and risks pulling down your score if you cannot clear the remaining amount promptly. There is a greater danger to your creditworthiness if the lender drags you to court.

The most important things to consider before becoming a guarantor

Before you agree to guarantee a loan to a friend, it is important to establish why he requires a guarantor. In most cases, it is because of bad credit. Guarantor loan reviews indicates that if a borrower has a poor credit score should, it should raise a red flag and need for extra scrutiny about his commitment to clearing the loan. Other important things to check and ask include;

  • How responsible is the borrower?
  • Why is your friend borrowing? Can’t he/her just save?
  • What assets can you commit as a guarantor?
  • Seeking legal advice if you are unsure about it.